Fed Historian: White House ‘Behaved Abominably’ on Summers

A Federal Reserve historian said the White House’s delays in nominating a chairman to the Federal Reserve allowed Lawrence Summers to face relentless attacks and could end up further politicizing the central bank.

Bloomberg News

Allan Meltzer

Allan Meltzer, a Carnegie Mellon University professor who has written several books chronicling the history of the central bank, said the White House’s indecisiveness was unprecedented.

“I think the White House behaved abominably,” said Mr. Meltzer in an interview. “It was clear long ago that it was going to be a controversial appointment. It should have either made a decision and announced it or cancelled it. There has never been anything remotely resembling this.”

Mr. Meltzer said the Fed has become increasingly politicized in recent years, particularly because of its expanded balance sheet. He said relentless attacks from lawmakers about Mr. Summers potentially winning the nomination for chairman only exacerbated this shift.

“The White House looks terrible in this thing,” he said. “To drag and drag and drag and drag and have people taking positions about the thing — there was no need for that. All they had to do was announce who was [President Barack Obama's] choice.”

Mr. Meltzer said the eventual nominee for the post will have to move quickly to show they are not beholden to the White House or to Congress.

“I hope they will be smart enough to think they have to show their independence,” he said.

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